Amalgamated Financial Corp. · NASDAQ:AMAL
Amalgamated Financial — Q1 2023 Earnings Presentation
28 slides from Amalgamated Financial's earnings presentation, Apr 27, 2023
Slide 1: First Quarter 2023 Earnings Presentation
Amalgamated Financial Corp. First Quarter 2023 Earnings Presentation April 27, 2023 amalgamatedbank.com Member FDIC
Slide 2: Safe Harbor Statements
Safe Harbor Statements INTRODUCTION On March 1, 2021 (the “Effective Date”), Amalgamated Financial Corp. (the “Company”) completed its holding company reorganization and acquired all of the outstanding stock of Amalgamated Bank (the “Bank”). In this presentation, unless the context indicates otherwi
Slide 3: Safe Harbor Statements cont.
Safe Harbor Statements cont. NON-GAAP FINANCIAL MEASURES This presentation contains certain non-GAAP financial measures including, without limitation, “Core Operating Revenue,” “Core Non-interest Expense,” “Tangible Common Equity,” “Average Tangible Common Equity,” “Core Efficiency Ratio,” “Core Net
Slide 4: 1Q23 Highlights
1Q23 Highlights BALANCE SHEET INCOME STATEMENT Core deposit Net Income - GAAP $21.3MM $-65.8MM | -1.0% growth(2) Core Net Income(1) $23.0MM Loan Growth $92.2MM | +2.2% Net Interest Income $67.3MM Core Diluted EPS(1) $0.74 CAPITAL Net Interest Margin +5 bps Core Return on Assets(1) 1.19% Tier 1 Lever
Slide 5: Solar Tax-Equity Investments
Solar Tax-Equity Investments OVERVIEW OF SOLAR TAX EQUITY INVESTMENTS • Metrics excluding the impact of tax credits or accelerated depreciation is a meaningful way to evaluate our performance and are adjusted in accordance with the below chart ◦ Immediate realization of tax benefits and subsequent a
Slide 6: Trends
Trends KEY FINANCIAL TRENDS THROUGH 1Q23 ($ in millions) Loans + PACE Ending Deposits + Brokered CDs > 10.5% CAGR(1) > 13.7% CAGR(1) $7,041 $4,973 $5,127 $6,356 $6,595 $74 $595 10.6% 5.8% $5,339 CAGR(1) CAGR(1) $3,868 $3,940 $912 $996 $4,641 (excl. (Loans) $3,439 $421 $627 $4,061 $4,131 Brokered CD)
Slide 7: Deposit Portfolio
Deposit Portfolio TOTAL DEPOSITS 1Q23 HIGHLIGHTS ($ in billions) • Total GAAP deposits increased $446.3 million or 6.8% in 1Q23 $7.3 $7.2 $7.0 $7.0 All following metrics exclude the effect of Brokered CDs $6.8 $6.6 $1.3 $1.2 $0.7 $1.1 $0.7 • Total deposits decreased $74.3 million compared to $0.6 $0
Slide 8: Super-Core Deposits
Super-Core Deposits SUPER-CORE DEPOSITS(2) BY IMPACT SEGMENT 1Q23 HIGHLIGHTS ($ in billions) • Super-core deposits(2) make up $3.5 billion, or 53.6% of total core deposits Weighted Avg. Impact Sector Total Balance % of Total Account Duration ◦ Super-core deposits are minimum ($M) Core Deposits 5-yea
Slide 9: Deposit Composition
Deposit Composition TOTAL CORE DEPOSITS BY IMPACT SEGMENT ($ in billions) $7.4 $7.3 $7.1 $0.4 $0.5 $0.4 $6.7 $6.6 $0.6 $0.6 $0.7 $0.4 $0.4 $0.5 $0.4 $0.5 $0.6 $0.5 $1.3 $0.6 $0.7 $1.1 $1.2 $0.6 $0.7 $1.0 $0.9 $0.9 $0.9 $0.9 $1.4 $1.3 $1.3 $1.4 $1.2 $2.2 $2.3 $2.3 $2.1 $2.2 1Q22 2Q22 3Q22 4Q22 1Q23 C
Slide 10: Political Deposits
Political Deposits HISTORICAL TREND ($ in billions) $1.3 $1.2 $1.2 $1.1 +15% $1.1 +17% growth $1.0 $1.0 growth $0.8 $0.8 +49% $0.7 $0.7 $0.7 growth $0.6 $0.6 $0.6 $0.5 $0.4 $0.3 $0.2 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 4/21/23 • Although cyclical
Slide 11: Interest Earning Assets
Interest Earning Assets INTEREST EARNING ASSETS OF $7.6B AS OF MARCH 31, 2023 We maintain a diverse, low risk profile of interest earning assets • No fossil fuel exposure • $828mm agency securities • $233mm of government • $1,551mm of non-agency guaranteed loans securities • $374mm residential solar
Slide 12: Held-to-Maturity Securities
Held-to-Maturity Securities HELD-TO-MATURITY SECURITIES 1Q23 HIGHLIGHTS ($ in millions) • HTM securities, excluding PACE assessments PACE (HTM) Non Pace HTM PACE (HTM) Yield Non-Pace HTM Yield represent 28% of the total investment portfolio $1,619 $1,541 • PACE securities saw $85 million of new grow
Slide 13: Investment Securities
Investment Securities SECURITIES – BOOK VALUE(1) 1Q23 HIGHLIGHTS ($ millions) • Investment Securities totaled $3.4 billion book value for 1Q23 $3,569 $3,579 $3,420 $3,485 $1,048 $973 $3,375 $887 • Agency securities made up 24.5% of the total $994 $828 portfolio, down from 25.5% in 4Q22, reflecting P
Slide 14: Investment Securities Composition
Investment Securities Composition AFS Portfolio Composition(1) 1Q23 HIGHLIGHTS ($ in millions) • Weighted avg. duration is 2.5 years for the $149 total securities portfolio, excl. PACE $592 $1,756mm AFS • AFS unrealized loss of $116.7 million currently $1,014 makes up 6.6% of the total AFS portfolio
Slide 15: Loans Held for Investment
Loans Held for Investment TOTAL LOANS LOAN COMPOSITION ($ in millions) ($ in millions) 38 38 39 43 335 327 40 338 334 464 456 $4,198 354 468 $4,106 426 924 389 926 743 805 $3,871 724 968 1,063 861 885 $3,648 816 $3,473 1,372 1,390 1,143 1,236 1,332 4.19% 4.40% 3.81% 3.82% 4.06% 1Q22 2Q22 3Q22 4Q22 1
Slide 16: Net Interest Income and Margin
Net Interest Income and Margin NET INTEREST INCOME & MARGIN 1Q23 HIGHLIGHTS ($ millions) • Net interest income was $67.3 million, compared to $67.3 million in 4Q22 Net Interest Income Net Interest Margin $67.6 $67.3 $67.3 • 1Q23 NIM at 3.59%; an increase of 5 basis points compared to 4Q22 • Loan pre
Slide 17: Non-Interest Income
Non-Interest Income CORE NON-INTEREST INCOME ex-solar (1) 1Q23 HIGHLIGHTS ($ millions) • Our trust business held $39.7 billion in assets under custody and $13.9 billion in $8.7 assets under management, compared to $38.1 billion and $13.4 billion, $7.5 $7.3 $7.5 $7.2 $2.8 respectively, in the precedi
Slide 18: Non-Interest Expense and Efficiency
Non-Interest Expense and Efficiency NON-INTEREST EXPENSE 1Q23 HIGHLIGHTS ($ millions) $38.6 $38.6 • Efficiency ratio of 53.3% for 1Q23 $36.3 $36.3 $35.6 $35.6 $34.0 $34.4 $34.0 $34.3 • Core efficiency ratio excluding the impact of our solar tax equity investments of 51.6% for 1Q23(1) • Non-interest
Slide 19: Credit Quality
Credit Quality NPA / TOTAL ASSETS 1Q23 HIGHLIGHTS 0.82% • Nonperforming assets were $38.7 million as of 1Q23, 0.80% 0.69% compared to $28.6 million in 4Q22 0.49% 0.44% • Net charge-offs of 0.25% in 1Q23 compared to net charge offs of 0.15% in 4Q22 due to a $1.2 million charge-off on a multifamily as
Slide 20: Allowance for Credit Losses on Loans
Allowance for Credit Losses on Loans 1Q23 HIGHLIGHTS ALLOWANCE WATERFALL ($ millions) • The allowance for credit losses on loans increased by $22.3 million compared to prior 21.2 66.3 0.1 0.5 0.4 — 67.3 quarter, primarily due to adoption of CECL • CECL adoption had a 51 basis point impact on the cov
Slide 21: Returns
Returns Core ROAE & Core ROATCE ex-solar (1)(2)(3)(4) 22.6% 21.8% 19.2% 19.9% 18.6% 19.2% 16.2% 16.8% 10.4% 10.7% 1Q22 2Q22 3Q22 4Q22 1Q23 Core ROAE ex-solar Core ROATCE ex-solar (1) Refer to Reconciliation of Non-GAAP Financial Measures on slides 26-27 for further details (2) ROAE was 10.3%, 15.2%,
Slide 22: Capital
Capital TIER 1 LEVERAGE RATIO 1Q23 HIGHLIGHTS • Regulatory capital ratios remained strong 7.69% 7.52% 7.50% 7.28% 7.27% ◦ Tier 1 leverage ratio of 7.50% as of 1Q23 7.34% 7.52% 7.50% 7.08% 7.16% ◦ Bank tier 1 leverage ratio of 8.30% as of Q1 2023 1Q22 2Q22 3Q22 4Q22 1Q23 Tier 1 Leverage Leverage Rati
Slide 23: Tangible Book Value
Tangible Book Value TANGIBLE COMMON EQUITY & TANGIBLE BOOK 1Q23 SUMMARY VALUE ($ millions) • TBV increase primarily driven by $21.3 million in net income, and a $11.4 million increase from the 21 previous quarter in the tax-effected 11 503 AFS mark-to-market adjustment. 493 1 ◦ TBV increase of 2.3%
Slide 24: 2023 Guidance
2023 Guidance 2023 FINANCIAL OUTLOOK - REVISED • Core pre-tax, pre-provision earnings(1) from $142 - $148 million to: ◦ $133 - $140 million - includes effect of forward rate curve through 2023 and reduced deposit growth • Net Interest Income from $256 - $263 million to: ◦ $248 - $255 million - inclu
Slide 25: Appendix
Appendix
Slide 26: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Three Months Ended December 31, (in thousands) March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022 2022 Core operating revenue Net Interest income (GAAP) $ 67,280 $ 67,346 $ 48,368 $ 67,280 $ 48,368
Slide 27: Reconciliation of Non-GAAP Financials
Reconciliation of Non-GAAP Financials As of and for the As of and for the Three Months Ended Three Months Ended December 31, (in thousands) March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022 2022 Tangible common equity Stockholders' equity (GAAP) $ 519,158 $ 508,955 $ 526,762 $ 519,160 $ 52
Slide 28: Thank You
Thank You amalgamatedbank.com Member FDIC
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